Purchase & Rehab Programs
Here are some sample options of the programs for purchase and/or purchase with rehab. Just know as you look over this that not every loan fits into these two options. Good news… We do our own underwriting!! No lengthy approval process like working with a bank. We have lots of room to move one way or another so these programs aren’t set in stone. We can get creative with cross collateral or other ideas in lieu of a traditional cash down payment as well. Call us today with your project needs!
Standard Purchase & Rehab Programs:
OPTION A- PURCHASE LOAN, BUSINESS USE: Borrower brings in a minimum of 20% down of the purchase price plus closing costs and our lenders fund the remaining amount necessary for the purchase. A higher percentage down payment is needed if the price is higher than $250k or if the situation with the house or one of the borrowers is unique.
OPTION B- LOAN WITH DRAWS, BUSINESS USE: Borrower brings in a down payment amount based on 65% to 75% of ARV(After Repair Value) plus closing costs, and our lenders fund the remaining amount needed for both the purchase and the rehab. We set aside the funds for the rehab at closing, and the funds are disbursed back to the borrower when certain progress marks are made in the form of draws. Take for example the following scenario:
Subject property price = $200k, ARV = $325k, Rehab = $50k. Down payment will be the rehab amount of $50k at initial closing, which is held for draws for the rehab. For example if we agree to $50k for rehab, we give you two draws, each for $25,000. You'll get one draw when you’re halfway done, and one when it’s finished or close to finished (more options are available for draws). Loan fees and closing costs are added into the loan, so you know with confidence when we quote you a down payment number, we will stick to it!
Both options above are the same on the following requirements: Borrower must be clearly buying for business use (non-owner occupied) either by titling as an LLC or have a personal track record of flipping houses or owning rentals.
Sample Costs and Other Terms
The loan fee and closing costs are variable based on the project, experience of the borrower, and money down. We can close in as little as 5 business days, but prefer 10 or more so we can find the best options for you. Most loans are 6 -- 24 months in length with an interest rate of 10% - 13%. Payments are interest only and the loans typically have no prepayment penalty. Need a lower rate on a longer term project?... Sometimes we can trade a minimum amount of guaranteed payments for a lower rate, down to the 9% to 10% range (example would be you agree to 6 months payments before payoff and the rate is 10.50% on the loan instead of 12%).
For more options or to discuss your project please call or email.